Louisiana takes a bite out of food stamp fraud

About 4 percent of Louisiana's $650 million food stamp program is eaten up by fraud each year.

To recoup some of the loss, the state's Social Services Department uses a 300G data warehouse with a geographic information system that helps identify patterns of fraud by recipients as well as grocery stores.

Eight years ago, when Louisiana switched from paper food stamps to an electronic benefits transfer system, it caused 'a flood of data,' said Raymond Pease, assistant director of the department's fraud and recovery section in the Office of Family Support. 'With the EBT system, we could track transactions by recipient and retailer, which was impossible with paper stamps.'

The department chose WebFocus business intelligence tools from Information Builders Inc. of New York to slice and dice the data generated by the EBT system, 'but we needed more,' Pease said.

About a year ago, the department decided to combine WebFocus with the ArcIMS suite of GIS tools from ESRI of Redlands, Calif.

'Adding that geographic component let us see trends and patterns on a map,' Pease said. 'WebFocus let us drill down and do data mining, but to have it mapped out provided a great deal of clarity.'

The EBT system still 'spits out reams and reams of data,' he said. 'We don't look for normal food stamp patterns, we look for anomalies.'

For example, a recipient might bypass several chain grocery stores near home to shop on the other side of town. Or certain transaction amounts might be large, or a large number of transactions might be performed very rapidly. 'We look for a hundred things,' he said. 'They're all defined in reports. Then we're able to map them.'

One Baton Rouge, La., store that had some suspicious transactions was shown the evidence in an Adobe Portable Document Format file. Employees confessed and action was taken against the store, which had previously flown under the radar, Pease said.

'Even if we save 1 percent or 2 percent, that's still a huge chunk,' he said.

Before combining the GIS capability with WebFocus, the unit spent weeks compiling periodic transaction data. 'Now we can compile it all in minutes,' Pease said.

The combination has proved especially valuable to law enforcement agencies. 'When we show them the tabled reports and maps, their jaws drop,' he said.

'Uninitiated workers can use the system productively within an hour,' Pease said. 'Once you put in that geographical element and geocode all the data in your database, you can do an unbelievable number of things. It's limitless.'